Aurora Innovation Inc. raised its proposed public offering from $350 million to $420 million, less than a day after announcing it.
On Wednesday, the Pittsburgh-based autonomous truck company canceled its second quarter earnings call after announcing the proposed public offering, instead detailing second quarter results in a letter to investors. The company hasn't kept its capital needs a secret — last quarter the company said that cash on hand would only last through 2025 and the company would not gross profit until 2026 — but it had not previously detailed plans to raise funds.
"They're trying to make sure that their cash needs are taken care of beyond 2025, clearly," Kimberly Forrest, founder and CIO at Bokeh Capital Partners, said.
She attributed the decision to raise capital now to broader investment trends in the artificial intelligence sector, as well as the autonomy sector. Over the past few months, stock prices have fluctuated significantly and unpredictably, and some are concerned about return on investment, as these industries, especially the autonomy sector, have taken longer to develop than initially expected.
"If you look at the self-driving car phenomenon, back in 2016 when it first really started going and Uber was all that and thought we were … going to have self-driving cars far before 2024 and here we are with just a handful of use cases," Forrest said. "There's limited use because developing self-driving cars is hard."
Forrest said investors were becoming nervous that the AI "hype is overblown," but that recent announcements from chipmaker AMD and Microsoft that AI spending will continue has calmed some of these nerves, at least temporarily.
"Before the last couple of days people were really mulling that and you can see it in the prices going down of AI-related stocks," Forrest said. "Microsoft said 'well, you know, [we] had some mixed results but [our] AI spend is going to continue. That relieved people enough to get them back entranced with AI. So Aurora is striking while the iron is hot. … They're being very opportunistic and there's no negative to that."
According to an SEC filing, the shares are arranged to be sold to underwriters Goldman Sachs, Allen & Co. and Morgan Stanley for $3.483 per share, with the underwriters expected to sell to the public for $3.60 a share beginning Aug. 2, after the offering is complete. The filing also states that Aurora granted the underwriters the option to purchase an additional approximately $63 million in shares within the next 30 days.
Following yesterday's announcement, shares dropped from approximately $4 to $3.60. But the stock has rallied with today's announcement to approximately $4.30 a share.
A spokesperson for Aurora declined to comment, noting that there are SEC mandates that limit what the company can publicly indicate before the offering closes tomorrow.
